A common attribution error is assigning all sales to paid marketing activities. In reality, most brands have a strong "baseline"—sales that would occur even without marketing. Accurate measurement requires modeling this baseline first, then attributing only the incremental lift from campaigns.
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With AI enabling precise control over media spend, key performance indicators are changing. Brands now move beyond simple Return on Ad Spend (ROAS) to more sophisticated metrics like incremental ROAS and contribution margin, reflecting a new emphasis on profitable growth rather than just volume.
A major challenge for CDPs is proving value, as revenue is often attributed to the final channel (e.g., email provider). By integrating their own engagement and sending capabilities, CDPs can create a closed-loop system, directly attributing revenue to data-driven campaigns and clearly demonstrating ROI to CFOs.
New measurement tools are moving beyond probabilistic models (guessing based on IP/device) to deterministic view-through attribution. By using first-party data like platform logins, marketers can now directly match an ad impression to a purchase, solving a major measurement challenge.
Brand campaigns reach the 95% of buyers not currently in-market. Instead of relying on vanity metrics, Square ties this investment to business outcomes by tracking the subsequent lift in organic traffic, which they've found converts better than paid channels.
Due to signal loss from cookie deprecation, no single model like MTA or MMM is sufficient. The new gold standard is using all available algorithms together in a machine learning framework, allowing them to influence each other for a more accurate ROI picture.
Standard attribution models, even multi-touch, fail to credit influential, non-clickable touchpoints like a child watching a Netflix show that inspires a purchase. This "Hot Wheels Problem" highlights the need to account for view-through attribution and the full, often hidden, customer journey.
Escape the trap of chasing top-line revenue. Instead, make contribution margin (revenue minus COGS, ad spend, and discounts) your primary success metric. This provides a truer picture of business health and aligns the entire organization around profitable, sustainable growth rather than vanity metrics.
Shift the mindset from a brand vs. performance dichotomy. All marketing should be measured for performance. For brand initiatives, use metrics like branded search volume per dollar spent to quantify impact and tie "fluffy" activities to tangible growth outcomes.
Position marketing as the engine for future quarters' growth, while sales focuses on closing current-quarter deals. This reframes marketing's long-term investments (like brand building) as essential for sustainable revenue, justifying budgets that don't show immediate, direct ROI to a CFO.
Solely judging marketing by last-touch attribution creates a false reality. This narrow metric consistently favors predictable channels like search and email, discouraging investment in brand building and creative storytelling that influence buyers throughout their journey. It's a losing battle if it's the only basis for decision-making.
